Almost everyone is suffering in this economy. People are losing their homes to the banks and even to the government. Knowing the rights you have in your Los Angeles foreclosure defense case can make a huge difference in the relief you can get.

Medeiros is a recent case coming out of Rhode Island that exemplifies the potential hazards of inaction. Medeiros et al.‚ v. Bankers Trust Company et al.‚ No. 2010-145-Appeal (R.I. S.Ct. Mar. 13‚ 2012). Medeiros purchased a home and secured a note for the purchase of the home with Bankers Trust Company (Bankers). For a couple of years Medeiros made the requisite payments but began to struggle financially. Because Medeiros was not in a good financial situation‚ he was unable to make payments to Bankers or to the town for the real estate taxes he owed.

The town has the ability to sell the property of any person who owes real estate taxes on that property. This is commonly referred to as a tax sale and the town is required to send notice of this tax sale to all interested parties. Interested parties include the homeowner‚ lenders and secured creditors. When the town sent notice to the parties in this case‚ the town failed to send notice of this tax sale to Bankers. Subsequently‚ the tax sale occurred and the property was bought by Fiduciary Trust Services (Fiduciary). Upon this sale‚ the town gave Fiduciary a tax deed that had been executed by the town.

Medeiros stayed in possession of the home for a year after the sale to Fiduciary. This was because the state of Rhode Island provides this period as a redemption period. A redemption period is the time after the foreclosure sale of a property where the debtor has the opportunity to pay the outstanding amount owed on the property in order to keep it. Every state has different statutes surrounding this “right of redemption.” States allow for this period of time because the loss of a property is such a large loss compared with the gain obtained by the buyer. This right is retained by the debtor even in cases where the foreclosure sale was the result of owed real estate taxes.

After the time had run‚ Fiduciary sought to end Medeiros’ right of redemption by filing a petition with the court. Medeiros received notice of the petition‚ and he failed to respond or file an answer with the court. Because of this inaction‚ the court granted Fiduciary a default judgment to terminate Medeiros rights of redemption.

This case illustrates how integral it is to answer every complaint and notice you receive. If you receive any notification of a case‚ lawsuit‚ complaint‚ etc.‚ you should seek the assistance of an attorney to help you understand the best way to respond. In foreclosure‚ an answer provides the property owner an opportunity to assert their claims to the property involved.

But allowing the time limit to run without answering only results in you losing the rights and defenses you have.

When Medeiros later sought to have his rights of redemption re-vested‚ the court held that to allow this would be inequitable. The court cited relevant law that states that where a default is entered in a foreclosure case on behalf of the buyer‚ the debtor’s rights of redemption are forever barred.

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